The bank lending channel of monetary policy: identification and estimation using Portuguese micro bank data

Table 1

Main banks’ balance sheet items as a percentage of the total assets: all banks

Average total assets of the 18 banks in our sample, amounted to €12.5 billion in
December 1998 (87 percent of the assets of the whole banking system)²⁰. For one third of
these 18 banks total assets stood above the average level. In 1998 these 6 largest banks,
each with total assets greater than €6 billion, could be seen as large banks in absolute
terms, their market share in terms of total assets (of the 18 banks) being 87 per cent.

From Table 1, which presents the average structure of banks’ balance sheets for some
selected years, we can see that for the 18 banks in our sample, credit granted to the private
non-monetary domestic sectors of the economy amounted to approximately 39 per cent of
their total assets in 1998, 3.7 and 3.3 percentage points less than in 1992 and 1995
respectively. On the liabilities’ side of the balance sheet total deposits held by the private
non-monetary sector with the 18 banks decreased from 65.6 per cent of total assets in
1992 to 42.8 per cent in 1998.

Table 2 presents the balance sheet structure separately for the 6 largest banks, 4
medium size banks and the 8 smallest banks in the sample. Tables 3 and 4 separate
respectively the most and the less liquid and the most and the less capitalised banks²¹.

²⁰ In December 1998, the credit and deposits in these 18 banks amounted to 96 per cent and 98 per cent
of the total credit and total deposits, respectively.

²¹ The criteria to define the sub-samples were based on average size, liquidity and capitalisation of each
bank in the whole sample period.

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